Salvador Rodriguez, reporting for CNBC:
Snap CEO Evan Spiegel on Friday said the social media company is
happy to pay Apple’s 30% commission rate on in-app transactions.
“We really feel like Snapchat wouldn’t exist without the iPhone
and without the amazing platform that Apple has created,” Spiegel
said on TechCheck. “In that sense, I’m not sure we have a choice
about paying the 30% fee, and of course, we’re happy to do it in
exchange for all of the amazing technology that they provide to us
in terms of the software but also in terms of their hardware
At first blush you might think this is lickspittle-ism. But I think Spiegel is right that Snap might not exist without the iPhone — or, if it did, that it would exist in a very different form. The iPhone and App Store have been very good for Snap. It’s a concept that is truly native to the smartphone.
But here’s the thing thing: Snap isn’t in the business of charging its users money. From Investopedia, citing Snap’s 10-K for 2020:
Substantially all of Snap’s revenue is generated from advertising,
which accounted for 99% of the company’s total $2.5 billion in
revenue in 2020, up from 98% in 2019.
99 percent of Snap’s revenue is from advertising, not a nickel of which Apple gets a commission from. I’m not faulting Snap in the least for building an ad-based business — Daring Fireball gets at least 95 percent of its revenue from advertising. But the CEO of a company whose business doesn’t rely on in-app purchases or subscriptions doesn’t really seem like a good person to ask about Apple’s commission structure.
Find me the CEOs of companies that generate a significant percentage of their revenue through App Store transactions who espouse the same sentiment as Spiegel. I’m not saying they don’t exist — I’m sure some do — but let’s hear from those with skin in the game.
★ Monday, 24 May 2021